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Future of Solar Energy in Massachusetts is Cloudy

Future of Solar Energy in Massachusetts is Cloudy

The solar photovoltaic energy market in Massachusetts is in disarray due to uncertainty in both the Solar Carve-Out II Program, better known as SREC II, and the net metering program. For both programs, the capacity limits set by the state have apparently been reached in part or in whole. Over the coming days, greater clarity is expected at least for the SREC program.

As explained in an earlier article, the Massachusetts Department of Energy Resources (DOER) announced on February 5, 2016 that applications had been received that exceed the capacity of the SREC II program capacity for systems larger than 25 kw. However, not all applications received were complete; DOER has sent many applications back and provided a deadline of Thursday February 25, 2016 to return a complete application. Applicants who do not meet this deadline will have their applications removed and are free to resubmit.

Therefore, until Friday, February 26, 2016, it is impossible to determine if the larger systems’ capacity has truly been exhausted (systems smaller than 25 kw still have remaining capacity, but that too is quickly being claimed).

DOER’s database of applications received for Solar Carve-Out II Qualified Units is available online and is updated frequently. That file shows totals (broken out by systems smaller than 25 kw and larger than 25 kw) in four categories: Statements of Qualifications; Assurances of Qualifications; Under Review/ Operational; and Under Review/Not Operational.

Systems included in the “Statements of Qualifications” category are in the program, have met all of the requirements, and are producing power and SRECs. Systems included in the “Assurances of Qualifications” category have met the requirements of the program, have an Interconnection Service Agreement, but are not yet producing power or SRECs (and construction may not have even started). The third category, Under Review/Operational, includes systems that are actually in service and producing power but as of yet have not been fully processed at the DOER. The final category, Under Review/Not Operational, are projects where an application has been submitted but the system is not in operation and it has yet to be determined if the project qualifies for SRECs.

As of February 19, 2016, only 25% of the program capacity (166 MW of 660 MW) has been filled with systems that are already producing SRECs (those with Statements of Qualifications). An additional 59% of the capacity (392 MW of the 660 MW) is filled with systems with Assurances of Qualifications. Critically, however, this category includes reserved capacity for systems that have not been built – and may never be built, or at least built in time. Projects in this category get nine months to move to the power-producing stage. Some of these projects with Assurances are awaiting construction pending the resolution of the net metering capacity limitations. As time passes, some of the projects likely will have their 9-month period expire, freeing up additional capacity under the 660 MW cap.

Projects that are in operation and producing power but that are still under review for SREC approval represent 7% of the capacity (44 MW of the 660 MW). Projects that are not yet in service but have applications under consideration represent 383 MW, or 58% of the program capacity. Many of these likely will be removed from the list later this week. Overall, the four categories collectively comprise 149% of the capacity.

Therefore, with so many moving pieces, it remains impossible to determine if the SREC II program is full. Come Friday, there will be greater visibility into the actual status of the capacity of the various categories described above. In addition, DOER has released an RFQ for technical support in analyzing different policy frameworks for the post-1600 MW solar incentive program (SREC III). Finally, legislators are considering net metering changes.

Add it all up and the Massachusetts solar crystal ball remains cloudy.

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